The Basel Committee has proposed a rewrite of its GSIB-designation methodology, tightening it in several key areas and also seeking views on adding consideration of a GSIB’s reliance on wholesale short-term funding as a designation criterion as is now done in the U.S.  Banks designated under this new methodology would come under costly surcharges while current GSIBs that moved into more stringent risk “buckets” would have higher GSIB risk-based surcharges. The Federal Reserve is planning to include this surcharge in its stress-test requirements, making it a still more binding requirement and increasing the bite of any increased requirements due to the new designation methodology (should the U.S. adopt it). 

The full report is available to retainer clients. To find out how you can sign up for the service, click here.